The broader market’s powerful “V” recovery off its mid-October lows recouped all of last month’s losses and then some, with the S&P 500 hitting new all-time highs this week. But not all sectors have kept pace, and it is in these underperforming areas where traders should look for rebound candidates that have the biggest upside potential left. Casino stocks are well off their yearly highs, made in early 2014. Investors jumped shipped as Chinese gaming revenue slowed thanks to Beijing’s anti-corruption crackdown. But I think the China fears have been greatly exaggerated, and I’m willing to bet on the house… Read More

The broader market’s powerful “V” recovery off its mid-October lows recouped all of last month’s losses and then some, with the S&P 500 hitting new all-time highs this week. But not all sectors have kept pace, and it is in these underperforming areas where traders should look for rebound candidates that have the biggest upside potential left. Casino stocks are well off their yearly highs, made in early 2014. Investors jumped shipped as Chinese gaming revenue slowed thanks to Beijing’s anti-corruption crackdown. But I think the China fears have been greatly exaggerated, and I’m willing to bet on the house at these depressed levels. Specifically, I like the risk/reward on Las Vegas Sands (NYSE: LVS). It trades with a current P/E ratio of 19, which is in line with the S&P 500 and below its peers. Plus, its 3.2% dividend yield should help put a floor under the shares. On the charts, there was a bullish divergence early this month with a new price low under $58 but no new highs in volatility. This likely signals a bottom. In addition, the sideways action between $58 and $65 over the past two and a half months appears to be forming a… Read More

Energy prices have plummeted across the board in recent months. West Texas Intermediate (WTI) crude has fallen to its lowest level since June 2012, while natural gas is trading near 11-month lows.  #-ad_banner-#Coal has been especially hard hit over the past few years thanks to the increasing supply of cheap natural gas and environmental concerns. A Republican takeover in Congress could help end the coal shaming and give prices a boost. Elections, like markets, are difficult to predict, but after the drawn-out decline in the sector, the downside risk appears limited. Prior to the recent selling, Market Vectors Coal ETF… Read More

Energy prices have plummeted across the board in recent months. West Texas Intermediate (WTI) crude has fallen to its lowest level since June 2012, while natural gas is trading near 11-month lows.  #-ad_banner-#Coal has been especially hard hit over the past few years thanks to the increasing supply of cheap natural gas and environmental concerns. A Republican takeover in Congress could help end the coal shaming and give prices a boost. Elections, like markets, are difficult to predict, but after the drawn-out decline in the sector, the downside risk appears limited. Prior to the recent selling, Market Vectors Coal ETF (NYSE: KOL) traded between $20 and $17 for most of the past year. Importantly, the new lows made earlier this month did not come with new highs in volatility. This is known as a bullish divergence and is often a sign that sellers have been exhausted and a bottom is in place. Peabody Energy (NYSE: BTU) is the largest private-sector coal company in the world. It suffered a string of losses and has fallen from its $74 peak in 2011 to under $10 on Monday.  This is the first time prices have been below $10 in a decade. Read More

The blue-chip Dow industrials were hit hard by the emotional selling that rocked the market in the past month. From its all-time high on Sept. 19 to its Oct. 15 low, the index gave up almost 1,500 points. It regained about half of those losses in less than a week, before giving back some of the gains in Wednesday’s sell-off. Year to date, the Dow is flat, and more than half of its 30 components are in the red, including American Express (NYSE: AXP). Shares of the credit card company are off 7.5% so far in 2014 and down 10%… Read More

The blue-chip Dow industrials were hit hard by the emotional selling that rocked the market in the past month. From its all-time high on Sept. 19 to its Oct. 15 low, the index gave up almost 1,500 points. It regained about half of those losses in less than a week, before giving back some of the gains in Wednesday’s sell-off. Year to date, the Dow is flat, and more than half of its 30 components are in the red, including American Express (NYSE: AXP). Shares of the credit card company are off 7.5% so far in 2014 and down 10% in the past three months.  The stock bounced from its lows last week after the company reported better-than-expected third-quarter earnings thanks to higher spending by its U.S. cardholders and an increase in interest income. AXP has largely traded between $78 and $94 for the past year. A move above midpoint resistance at $86 targets a run back to the channel top. The $94 target is about 12% higher than recent prices, but traders who use a capital-preserving, stock substitution strategy could make more than 80% on a move to that level. #-ad_banner-#​… Read More

In case we had forgotten it is the banks’ job to make money, they are hiking ATM and checking account fees to record levels to generate additional revenue. In fact, if you use an out-of-network ATM, your average fee will be $4.35 per transaction, a 5% increase over the past year, according to a new survey by Bankrate.com. #-ad_banner-#More fees, along with greater loan demand, strength in investment banking and cost-cutting, are expected to result in higher third-quarter profits at the nation’s largest banks. The top six are anticipated to show combined net income of $16.2 billion for the quarter,… Read More

In case we had forgotten it is the banks’ job to make money, they are hiking ATM and checking account fees to record levels to generate additional revenue. In fact, if you use an out-of-network ATM, your average fee will be $4.35 per transaction, a 5% increase over the past year, according to a new survey by Bankrate.com. #-ad_banner-#More fees, along with greater loan demand, strength in investment banking and cost-cutting, are expected to result in higher third-quarter profits at the nation’s largest banks. The top six are anticipated to show combined net income of $16.2 billion for the quarter, according to analysts tracked by Thomson Reuters, a 21% increase over Q3 2013. Most banks are still trading well below their pre-financial-crisis levels, while the economy continues to strengthen. A good way to take advantage of this is with the Financial Select Sector SPDR ETF (NYSE: XLF). While the broader stock market has regained all of its losses and made new high after new high this year, XLF has only achieved a halfway retracement from its 2007 highs to its 2009 lows. That leaves plenty of room for continued upside. XLF broke out of its four-year trading range in early… Read More

Do you remember when the doomsayers were calling for a financial meltdown in China? Turns out fears of a banking system collapse and economic slowdown were greatly exaggerated. But traders are right to pay close attention to what goes on in China, as it is an important barometer of global economic activity. #-ad_banner-#China and other Asian nations are expected to lead global spending for capital projects and infrastructure, which is estimated to top $9 trillion a year by 2025, according to a new report by PwC and Oxford Economics. Beneficiaries of this trend include companies that make heavy… Read More

Do you remember when the doomsayers were calling for a financial meltdown in China? Turns out fears of a banking system collapse and economic slowdown were greatly exaggerated. But traders are right to pay close attention to what goes on in China, as it is an important barometer of global economic activity. #-ad_banner-#China and other Asian nations are expected to lead global spending for capital projects and infrastructure, which is estimated to top $9 trillion a year by 2025, according to a new report by PwC and Oxford Economics. Beneficiaries of this trend include companies that make heavy machinery, such as American icons Deere & Company (NYSE: DE) and Caterpillar (NYSE: CAT).  This brings me to an interesting chart. Below you can see how closely correlated the two stocks have been for much of the past five years. Yet, in 2014, CAT is up 15% while DE is down 9%.  This divergence presents a near-term bullish opportunity in Deere. Shares of DE appear to have made a higher low this week versus their 52-week lows. If they can break through the midpoint of the sell-off from the… Read More

It looks like the summer of 2013 could be a repeat of last summer with extreme volatility in crop prices thanks to more potential drought concerns. Little, if any snow cover or moisture to replenish the soil across much of the Midwest leaves the season ahead vulnerable to another price shock.  Major agricultural chemical producer DuPont (NYSE: DD) is currently sitting at the low end of its two-year trading range from $42 to $56. The chart pattern targets an $8 move from the breakdown point at $50 to new multi-year highs at $58. Only a close below the $40… Read More

It looks like the summer of 2013 could be a repeat of last summer with extreme volatility in crop prices thanks to more potential drought concerns. Little, if any snow cover or moisture to replenish the soil across much of the Midwest leaves the season ahead vulnerable to another price shock.  Major agricultural chemical producer DuPont (NYSE: DD) is currently sitting at the low end of its two-year trading range from $42 to $56. The chart pattern targets an $8 move from the breakdown point at $50 to new multi-year highs at $58. Only a close below the $40 support level on a weekly basis would negate the bullish trend. The $58 target is almost 30% higher than current prices, but traders who use a stock substitution strategy could make triple-digit returns on a move to that level.#-ad_banner-# One major advantage of using long call options rather than buying shares is putting up much less to control 100 shares — that’s the power of… Read More

The bullish trend in technology stocks has reasserted itself following an April pullback. With a 14% gain so for in 2014, the Nasdaq 100 has outperformed all other major indices. And the tech index is up 28% over the past 52 weeks with new 14-year highs now almost a weekly occurrence. Pandora Media (NYSE: P) is singing a much sadder tune, however, with shares of the streaming music provider down roughly 2% year to date. Yet, the high correlation with the tech sector is evident, as the stock is still up nearly as much as the Nasdaq 100 over the… Read More

The bullish trend in technology stocks has reasserted itself following an April pullback. With a 14% gain so for in 2014, the Nasdaq 100 has outperformed all other major indices. And the tech index is up 28% over the past 52 weeks with new 14-year highs now almost a weekly occurrence. Pandora Media (NYSE: P) is singing a much sadder tune, however, with shares of the streaming music provider down roughly 2% year to date. Yet, the high correlation with the tech sector is evident, as the stock is still up nearly as much as the Nasdaq 100 over the past 52 weeks despite the recent pause. The four-month sideways action between $22 and $28 projects a $6 move to $34 on an upside breakout. The midpoint of the channel provides support at $25 to lean on. The $34 target is about 30% higher than recent prices, but traders who use a capital-preserving, stock substitution strategy could make more than 80% on a move to that level. #-ad_banner-#​One major advantage of using a long call option rather than buying a stock outright is putting up much less capital to control 100 shares —… Read More

Cameco Corporation (NYSE: CCJ) is involved in the exploration, development, mining, refining, conversion and fabrication of uranium for use in electricity generation in nuclear power reactors. The stock traded at a high near $45 in early 2011, just prior to the earthquake and tsunami that destroyed the Fukushima Daiichi nuclear power station in Japan. While this tragedy did slow the industry’s growth, it did not halt this efficient form of energy production, which provides about 11% of the world’s electricity. Shares of CCJ have been volatile for the past week after… Read More

Cameco Corporation (NYSE: CCJ) is involved in the exploration, development, mining, refining, conversion and fabrication of uranium for use in electricity generation in nuclear power reactors. The stock traded at a high near $45 in early 2011, just prior to the earthquake and tsunami that destroyed the Fukushima Daiichi nuclear power station in Japan. While this tragedy did slow the industry’s growth, it did not halt this efficient form of energy production, which provides about 11% of the world’s electricity. Shares of CCJ have been volatile for the past week after the company announced it would shut down production at its McArthur River mine and Key Lake mill due to a union strike. However, management said it doesn’t expect the strike to affect its uranium delivery commitments. Looking at the bigger picture, CCJ has consolidated from $18 to $26 for the past three years. A base has formed with the long-term prospects favoring the bulls at these levels. A conservative target is the $22 midpoint of the trading range that should act as the first resistance level. If CCJ can break out… Read More

Sometimes the most profitable investments are made by going against the grain — selling when everyone else is buying and buying when everyone else seems to be selling.  Take PR nightmare Lululemon Athletica (NASDAQ: LULU) for example. The stock is off more than 50% from last summer’s highs above $80 on declining sales, competition worries, product recalls, and of course, a big-mouthed CEO (recently former CEO) whose excuse for product defects was “some women’s bodies just don’t work” for its yoga pants. #-ad_banner-#​Yet LULU is still the… Read More

Sometimes the most profitable investments are made by going against the grain — selling when everyone else is buying and buying when everyone else seems to be selling.  Take PR nightmare Lululemon Athletica (NASDAQ: LULU) for example. The stock is off more than 50% from last summer’s highs above $80 on declining sales, competition worries, product recalls, and of course, a big-mouthed CEO (recently former CEO) whose excuse for product defects was “some women’s bodies just don’t work” for its yoga pants. #-ad_banner-#​Yet LULU is still the top-selling manufacturer of fashionable activewear, according to retail analyst Jeff Green. And on the chart, we saw a bullish divergence, with a new 52-week low made on June 13 without new highs in volatility. This can be a technical sign that a bottom has been put in place in a formerly freefalling stock.   At this point, I’d say the risk/reward favors the bulls. While five-year midpoint support at $40 has been violated, LULU has traded in a range from $35 to $45 for the past three and a half months. An upside breakout of… Read More

The bull market run in 2014 has not treated all equally. While the broad market S&P 500 is up 6.5% for the year, the Dow industrials have only eked out a 1.7% gain. If the bull continues its charge into 2015, the blue chips are likely to play catch up. One of the components that has held the Dow back is Wal-Mart Stores (NYSE: WMT), which is down almost 5% year to date. WMT has been largely bound by a range between $72 and $80 for the past year and a half. The stock is currently trading above… Read More

The bull market run in 2014 has not treated all equally. While the broad market S&P 500 is up 6.5% for the year, the Dow industrials have only eked out a 1.7% gain. If the bull continues its charge into 2015, the blue chips are likely to play catch up. One of the components that has held the Dow back is Wal-Mart Stores (NYSE: WMT), which is down almost 5% year to date. WMT has been largely bound by a range between $72 and $80 for the past year and a half. The stock is currently trading above solid support at $72, and I believe the risk/reward favors the bulls at these levels. An upside breakout through $80 resistance targets an $8 move to $88.  #-ad_banner-#​The $88 target is about 18% higher than recent prices, but traders who use a capital-preserving, stock substitution strategy could make more than 140% on a move to that level. One major advantage of using a long call option rather than buying a stock outright is putting up much less capital to control 100 shares — that’s the power of leverage. But with all of the potential… Read More